This maiden listing of a security token offer could pave the way for a safer way to trade digital bonds in the future.
DBS listed its first security token offering (STO) on its DBS Digital exchange (DDEX) on May 31, priced at $15m with a six-month tenor and a coupon rate of 0.6% per annum, through private placement.
This bond will be traded in board lots of $10,000, highlighting the DDEx’s ability to offer tokenised assets for trading at smaller denominations compared to traditional venues and conventional securities. DDEx-listed securities are available for secondary trading among institutional and accredited investors.
Asset digitalisation via the issuance of security tokens could present a tremendous opportunity for corporates seeking alternative platforms to raise funds from Asia Pacific’s private capital markets, DBS Group Head of Capital Markets Eng-Kwok Seat Moey said.
“We expect asset tokenisation to increasingly become more mainstream as more of our clients start to embrace security token issuance as part of their capital fund raising exercise which we believe will boost Singapore’s ambitions to be a digital asset hub in Asia,” Eng-Kwok said in a statement.
The Asia-Pacific region currently accounts for approximately a third of the global private equity market, hitting a record US$4.73 in 2020.
The DBS Digital Bond adheres to the current bond legal framework, giving investors the same legal certainties and protections as traditional bonds.